Monday, December 22, 2003

Gittins: ignoring the elephant in the living room: "There's just one small problem with the call for the abolition of stamp duty and its replacement with a comprehensive land tax: as the report's fine print itself makes clear, it's got stuff-all to do with the affordability of housing."

Given that land price is the capitalised or exchange value of privately retained site rent, its got everything to do with it. The call to replace stamp duty by annual land dues is sound, but an additional approach would be to abolish grants to the states and to local government and empower them, especially local government, to raise revenue from rates and land taxes. In other words, abolish rate pegging.

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